Walmart's Latest Bright Idea: Let Customers Do the Schlepping
Walmart is tossing around an idea that could radically change the e-commerce shipping game. It could give the company a huge advantage -- or it could seriously damage Walmart's reputation and, worst-case scenario, fortune. In a nutshell, it wants to offer in-store customers a discount for taking packages to online customers who want same-day delivery.
03/29/13 10:42 AM PT
Walmart wants to get the jump on e-tail competitors such as Amazon by widely offering same-day delivery for online purchases, executives told Reuters in an exclusive interview. Instead of contracting with a shipping provider, it would use one of its most plentiful and never-ending resources: the customers who stream into its 4,000 stores every day.
Walmart would essentially crowdsource the deliveries by offering customers in the store the opportunity to deliver packages to nearby recipients. In exchange, the customers would get a discount on their own purchases.
The idea is still in the very early planning stages, according to the Reuters report, and it is unclear if it will ever come to fruition.
Walmart did not respond to our request to comment for this story.
An Interesting Twist
The idea is an interesting twist on the crowdsourcing business model, CorraTech COO Michael Harvey told the E-Commerce Times. "It is also intriguing because Walmart is proposing to aggressively use something that Amazon simply doesn't have -- in-store customers."
That said, "there are a lot of issues that need to be settled before this could ever see the light of day," he acknowledged.
Indeed, there are enough potential pitfalls to give a corporate attorney immediate chest pains.
Long - Very Long - List of Liabilities
For starters, the in-store customers might be tempted to keep the packages intended for delivery, noted attorney Karen E. Edwards, an instructor in the University of South Carolina's retailing department.
"Walmart would want to have a proof-of-delivery system, as well as a written agreement with the delivery person that includes a reimbursement clause if the goods are damaged or not delivered," she told the E-Commerce Times. "That would probably have a chilling effect on some people who otherwise might have performed the service, but would also reduce the likelihood of theft."
Even so, disputes would certainly arise.
"Bottom line, Walmart would most likely be held ultimately liable to the online customer for delivery of the product, because it developed the delivery mode," said Edwards.
Also, depending on the state law, Walmart could be liable for injuries to the delivery person or injuries caused by the delivery person.
"Walmart would likely work into the agreement with the delivery person an acknowledgment that they are not an employee and therefore not covered by Worker's Compensation, plus a waiver and release of liability for injuries that occur as a result of the errand, which would seek to cover for accidents that may occur, as well as intentional injuries caused by third parties or the online customer," Edwards said.
"Note that such releases are not bullet-proof," she added.
Walmart also would need to make sure the driver was insured, and it would likely require the online customer to agree to hold it harmless for any injuries related to the delivery of the goods, Edwards pointed out.
"Plus, it would need to work into the agreement with the delivery person an indemnification clause that would state that the delivery person would reimburse Walmart if the online customer or other third party sues Walmart for something the delivery person did to harm them," she suggested.
In short, Walmart has some very big legal hurdles to overcome with this idea.
Walmart the Job-Killer
Walmart might also find itself the target of widespread outrage if something should go wrong with the idea, warned David Johnson, principal of Strategic Vision.
If anyone -- customer, delivery person or bystander -- were hurt in connection with the system, the cost to Walmart would be far more than any financial liability.
People might also question why Walmart would use its customers when it could be creating jobs by hiring professional delivery staff, Johnson told the E-Commerce Times.
"It took Walmart a long time to defuse the idea that it was killing mom-and-pop stores, and many still believe that is true," he pointed out. "This service will only restart that conversation."